Goldman Sachs denies withdrawal from digital assets desk

The chief financial officer at Goldman Sachs has written off recent news stories about the investment bank abandoning plans for a cryptocurrency trading desk as “fake news”, according to reports from CNBC.

Goldman Sachs CFO describes reports of its crypto desk withdrawal as fake news

Reporting from the TechCrunch Disrupt Conference in San Francisco, the financial news broadcaster spoke to Martin Chavez who said he had no idea where the reports came from.

“I never thought I would hear myself use this term but I really have to describe that news as fake news,” he said.

Crypto market dives

Business Insider first broke the story about the bank’s supposed u-turn, but it was picked up across the crypto-focused media and caused a dramatic negative reaction on digital exchanges: ethereum dropped 20% in a tumultuous 24 hours of trading on Wednesday after the news broke.

Bitcoin, which had been mounting a strong rally since mid August, held up a little better than many of its rivals, but still lost nearly 12% over Wednesday and Thursday. Prices were rebounding on Friday, and a round-up of the top 10 prices moves will be published here later this morning.

Overzealous investors

While denying that Goldman Sachs was backpedalling on the launch of a cryptocurrency trading desk, Chavez told CNBC that digital market investors may have been overzealous in their initial expectations of its December announcement of plans for the desk.

“When we talked about exploring digital assets it was going to be exploration that would be evolving over time,” he said.

He added: “Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical Bitcoin, and as they got into it they realized part of the evolution but it’s not here yet.”

Fake news or inaccurate reporting?

The incident raises further the issue of fake news surrounding the crypto asset market following the denial earlier this week by Singapore sovereign wealth fund Temasek that it had made a substantial investment in Bitmain’s pre-initial coin offering funding.

The term fake news suggests the spread of misinformation by maliciously-motivated actors to cause harm to reputation.

It is much more likely that the Business Insider report was not malicious in intent and that the anonymous insiders quoted as sources for the story were ill-informed – always a danger when relying on sources who refuse to be quoted directly.

The latter is not fake news, merely inaccurate reporting.